Fpl Adds Telecom Venture

FPL Group is wading further into the telecommunications industry, following other power companies who have found the lure of the Internet too strong too ignore.

Juno Beach-based FPL is the parent of the state's largest electric utility, Florida Power & Light. Starting Jan. 1, it will also be the parent of a telecommunications unit, company officials said.

The new unit will acquire a 1,600-mile fiber-optics network put together over the years by Florida Power & Light. The subsidiary will invest at least another $100 million to expand the network into the state's major metropolitan areas -- doubling the network's size to 3,000 miles.

"There will be few companies that will have the breadth of coverage as well as the quantity of fiber that we have," said Neil Flynn, who will head the telecom unit.

FPL's current network runs up the eastern coast of the state from Miami to Jacksonville and up the western coast almost as far as Tampa. The expansion will build in Fort Lauderdale, West Palm Beach and Boca Raton, as well as several other cities.

The new company, which will have its headquarters in Plantation, will start with 40 employees, but Flynn hopes to bring that up to 100 by the end of next year.

FPL cobbled the network together over more than a decade to allow the utility to run phone calls and send information over a private network. The company found it had extra capacity on the network, and so a few years ago it started leasing out the excess to phone companies as a wholesaler.

Now, FPL hopes to attract cable companies and Internet service providers, as well.

For now, Flynn says the company will not lease out the network to individual businesses, except to Florida Power & Light, which will stay on as a customer of the telecom unit.

It won't be easy. FPL will go up against some deep-pocketed competitors in Florida, including AT&T, GTE and BellSouth, as well as aggressive newcomers such as Level 3 Communications.

FPL's telecom business expects to draw in about $30 million in revenue this year, a pittance compared to the $6.6 billion in revenue FPL amassed in 1998. But as the business attracts more clients, Flynn predicts revenue of $40 million in 2000.

Flynn is adding customers. Communications company Florida Digital Network started using FPL's network about three months ago to offer its clients new services such as high-speed Internet.

"It allows us to get to market quicker," said Jim DaBramo at Florida Digital.

Flynn says the business is profitable and will remain that way even through the expansion. But the company told a group of securities analysts last week in New York that the unit won't make a major contribution to earnings for at least a few years.

FPL also is not the first power company to be attracted by the Internet business. Florida Progress, which owns the electric utility Florida Power, created Progress Telecommunications in November 1998 to take advantage of growth in the communications industry.

"It's an attractive business," said Florida Power's Mary Estes.

Leslie Hillman can be reached at lhillman@sun-sentinel.com or 954-356-4664.